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PayPal had already fired 2 CEOs, the dot-com boom was crashing down around them and they were bleeding $10 million dollars a month due to fraud, low margins and arbitrary management decisions 1. The Job A CEO does only three things. Sets the overall vision and strategy of the company and communicates it to all stakeholders. Recruits, hires, and retains the very best talent for the company. Makes sure there is always enough cash in the bank. 2 *He set the strategy of becoming the world's first global currency. It wasn't met, but it convinced a lot of people to sign up 1. *Peter Thiel raised $200 million for PayPal at the top of the dot-com boom, by convincing investors that if they just take 1% of the world's transactions they would make a very handsome profit 1. *He brought on Ukrainian boy-genius Max Levchin and made sure that he, and the engineers Max subsequently hired were taken care of 1. *He helped merge with *when he realized that eBay was going to try and crush them. In turn he protected the employees and investors frompossible death in adverse conditions (bursting bubble/BillPoint) 1. He had completed all these tasks both as CEO of Confinity, and part of the management team at PayPal. The Reasons The previous CEOs made arbitrary decisions that did not fit in with the jobs they were meant to perform. Examples include, migrating to the Windows operating system (insecure/slow), changing the brand to (slightly pornographic), and not addressing the fraud issue 13. In turn, based on his track record and abilities he was appointed PayPal's CEO by the board. He then reverted the arbitrary decisions, forced the engineering team to reduce fraud, cut costs, helped to organize the IPO post tech boom (no mean feat), and finally helped the eBay acquisition go through. In October of 2000, things were pretty crazy at PayPal. The burn rate was $10 million/month. There were about 4.5 months of runway left. When I returned as CEO, it wasn’t all of a sudden. I was the Chairman and came back as the interim CEO. We went through a 6-7 month process of trying to find a permanent one. The one decent candidate that we found sort of didn’t work out. Things were going well, so the board agreed to have me be CEO. But the company was about to go public, so the board insisted that there be a Chief Operating Officer (COO) too. COO, of course, is code for the #1 replacement candidate for CEO—it’s like the Vice President in U.S. politics, only more adversarial. I was able to convince the board to make David Sacks COO, which was probably a good, safe move since David was perceived to be crazier than I was. Thinking carefully about these things can lead to powerful insurance policies against getting deposed or executed at trials board meetings. -- All of the people in what is today called "The PayPal Mafia" were not equal co-founders or anything, so yes, there was an obvious and established pecking order where (at the time of the IPO), Peter Thiel was the CEO and everyone reported to him, Max Levchin was the CTO and everyone technical reported to him, etc. Non-technical people whose names you may recognize included David Sacks, Roelof Botha, Reid Hoffman, Keith Rabois, Luke Nosek, Eric Jackson, Premal Shah, and Dave McClure. Technical people whose names you may recognize include Chad Hurley, Steve Chen, Jeremy Stoppelman, Russ Simmons, and Jawed Karim. Yes, there was a clash between Elon Musk and the PayPal gang ("led" by Peter Thiel), and so Elon was CEO for awhile and then left, and then Peter became CEO. I think they are all friends (at least friendly) nowadays. At least they are certainly co-investing in each others' ventures and such. The culture was very conducive to aggressive Type-A personalities, in that you were expected to argue vigorously and that was okay. As a young new grad, I liked that culture, it was a probably a great way to be introduced to the working world.